Lloyds Banking Group chairman to step down

by Gill Montia

Story link: Lloyds Banking Group chairman to step down

The chairman of Lloyds Banking Group is to step down.

Sir Victor Blank joined Lloyds TSB from Trinity Mirror Group in January 2006, replacing Maarten van den Bergh.

Since the hurried merger of Lloyds TSB and HBOS last year, both Sir Victor and Lloyds’ chief executive, Eric Daniels, have been under attack from shareholders.

Lloyds TSB had been holding its own during the credit crisis, having avoided some of the disastrous investment and lending strategies adopted by its rivals.

While the takeover of HBOS required an initial injection of Government cash this was largely to oil the wheels of the merger but the toxic assets brought to the group by HBOS could soon see the group pass to majority state ownership.

The taxpayer currently holds 43% of Lloyds Banking Group and participation in the Treasury’s Asset Protection Scheme raise the stake to around 65% or even 75%.

In 2008, the group’s HBOS subsidiary posted a loss of £10.8 billion while Lloyds TSB remained in profit.

Earlier this month, Lloyds warned that writedowns on bad debt at HBOS would rise 50% during 2009.

The bank blamed “the impact of the further economic deterioration, including the effects of rising unemployment, reduced corporate cash flows, the continuing impact of lower house prices and falls in the value of commercial real estate” for the expected rise.

Shareholders continue to question the extent of due diligence carried out as the government-brokered takeover of HBOS was hurriedly agreed.